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A little-known Zurich agency-Weber, Hodel, Schmid-last week won the coveted $50 million assignment to turn the Swatch image into a European car brand.

Micro Compact Car, a joint venture between Daimler-Benz and SMH, the Swatch watchmaker's parent, will launch the diminutive two-seater, officially called the Smart car, next April in eight European countries.

FAVORED OVER BARCELONA SHOP

MCC executives deliberated for weeks before choosing Weber, Hodel, Schmid over the other finalist-SCPF, a Barcelona shop set up last year in a breakaway from Delvico Bates.

MCC's original short list of agencies featured small, creative shops: Wieden & Kennedy, Amsterdam, and two German agencies, Munich-based Start and an agency from Mercedes-Benz's roster, Springer & Jacoby, Hamburg.

Rivals said Wieden pulled out because of concerns by its biggest client, U.S.-based Nike, that a car account would distract the agency from the footwear giant's work.

An hour away from MCC's Swiss headquarters, German-speaking Weber, Hodel, Schmid also had logistics and language in its favor over the Spanish shop.

Formed in 1991, Weber, Hodel, Schmid had 1996 billings of about $56 million from clients such as Mediamarkt, a German consumer electronics chain in Switzerland. Its international experience includes creating ads that run in 33 countries for Swiss Bank Corp.

In addition to advertising, Weber, Hodel, Schmid will handle brochures and other promotional material, in different languages. No decision yet on whether the agency will also handle media.

"We felt that [Weber] carried across the Smart car and the whole mobility concept very well," said an MCC spokeswoman.

COOPERATIVE SETUP

A cooperative setup called "Smart Factory," in which both MCC and Weber, Hodel, Schmid will share offices, will carry out the work. General manager of Smart Factory will be Liliane Lerch, a member of Weber, Hodel, Schmid's board since 1994.

"An important part of our pitch was the way we proposed to work together," Ms. Lerch said. "We're going to build up a second unit of our agency that works exclusively for Smart, but it will not have much of a classical advertising structure. It will be almost as if the client is its own account executive."

The Smart Factory concept arose out of the recognition that MCC already has a lot of advertising expertise in its ranks.

"We recognize that the client sometimes has the better ideas," Ms. Lerch said. "Smart Factory will be a group of people that works exclusively on Smart and lives the philosophy of Smart."

That concept may be as novel as the car, touted as fun but useful with a future-oriented vision of mobility in crowded cities.

For example, MCC's German subsidiary is negotiating a deal with German airline Lufthansa and the country's national railroad to enable travelers to rent a Smart car for local transportation at their destination as part of the price of